Publication “Integrated REDD+: a financial model to support forest protection, agricultural production and decarbonization efforts

Rio de Janeiro, 22 May, 2017 – Today the Brazilian REDD+ Alliance published the report about Integrated REDD+ markets, a proposal of separate, but complementary, carbon markets, as a solution to facilitate the inclusion of REDD+ into markets to meet the targets of the Paris Agreement. This proposal suggests a financial model to support forest protection, agricultural production and decarbonization efforts in an integrated way, both at the international as well as the domestic or jurisdictional levels.

In the current Brazilian economic crisis, where the budget of the Ministry of the Environment was reduced by 51%, REDD+ is an important tool to combat deforestation and generate financial resources to support the government, rural producers, traditional and indigenous communities, and a means to protect Brazilian natural resources and to end illegal deforestation.

How would the Integrated REDD+ mechanism work?

Separate but complementary markets are created so that REDD+ units are negotiated in a pool of other REDD+ units, in order not to affect the pricing of other mitigation options.

Internationally, supplementarity requirements are adopted so that nations or entities do not meet their targets solely through the use of a single mechanism, but by adopting a combined approach.  For instance, a minimum tranche of a country’s target could be met by adopting internal decarbonization measures and/or energy and industrial offsets. Provided that this ‘quota’ is met, this same country could complement its targets using REDD+ offsets.

In producer countries, supplementarity requirements would ensure that REDD+ finance in tropical countries involves parallel investments in complementary activities, adopting a “stocks and drivers” approach. For example, for each investment into forest protection, a complementary investment is made into tackling the drivers of deforestation (predominantly, the intensification of agriculture to reduce pressure on land) and/or reforestation of sensitive areas.

A series of positive impacts could be expected by adopting this approach:

• The separation of markets would not affect the price of other mitigation options;
• by ensuring that non-REDD+ options receive the necessary financial resources to direct investment in R&D and investment in low-carbon infrastructure, the process of innovation and decarbonisation of industrial, transportation and energy complexes would continue;
• including REDD+ units as a complement to these measures, though, would reduce the average cost of GHG abatement and enable countries/entities/sectors to adopt more ambitious targets;
• the inclusion of REDD+ in markets, at the same time, would ensure access to financial incentives to tackle this important source of emissions. This is particularly important for most tropical countries, such as e.g., Brazil, where national budgets for the forest protection have recently been reduced by over 50%, jeopardising the past efforts to reduce deforestation and the country’s ability to meet its NDC targets;
• given that the abatement profile of reducing deforestation is front loaded (as opposed to tree planting or the replacement of energy infrastructure, for instance), it would accelerate the climate benefits associated of mitigation, ‘buying time’ for other measures to enter into force.

 About the Brazilian REDD+ Alliance 

Created by BVRio Environmental Exchange, Biofílica Investimentos Ambientais, Fundação Amazonas Sustentável (FAS), Instituto Centro de Vida (ICV), Instituto de Conservação e Desenvolvimento Sustentável da Amazônia (Idesam), Instituto de Pesquisas da Amazônia (IPAM), Environmental Defense Fund (EDF), and Instituto do Homem e Meio Ambiente da Amazônia (Imazon), the Brazilian REDD+ Alliance has the objective to promote the use of REDD+ as a tool to combat deforestation and generate financial resources to support the government, rural producers, traditional and indigenous communities. Brazil has the potential to generate over US$ 70 billion to 2030through REDD+ in the Amazon region, and the Alliance aims to ensure that the country is in a position to lead the growing markets for GHG emission reductions internationally.